The Nonadmitted and Reinsurance Reform Act of 2010 resulted in significant changes to the law regarding surplus lines insurance regulation and taxation. See Publication 94-431, Guidelines for Premium Tax Compliance with the Nonadmitted and Reinsurance Reform Act.
Surplus lines insurance policies placed by licensed Texas surplus lines agents are not subject to the insurance premium tax if an exemption applies. These exemptions are based on Texas statutory exemptions or federal preemptions of state law.
Premiums on the following surplus lines insurance policies are exempt by Texas statutes:
Certain surplus lines insurance policies are exempt from the insurance premium tax based on the identity of the policyholder. This is because some federal law preempts state taxation of certain individuals and organizations. Texas recognizes the following as exempt based on a federal preemption of Texas law:
Requests for refunds of surplus lines tax paid in error based on these exemptions must be sent in writing to the Comptroller of Public Accounts, 111 E. 17th Street, Austin, Texas 78774-0100.